When to use a debit card: 3 times it makes sense

With so many payment options available these days—credit cards, payment apps, digital wallets—it can be tricky to know when to use a debit card. Here are three common situations when using your debit card makes sense, along with some tips to help you make the most of your card’s features.

1. When you need cash

If you need to withdraw cash, using your debit card at an ATM is often the easiest way. To avoid ATM fees, use machines within your bank’s preferred network.

It might also be convenient to ask for cash back at checkout when making a debit card purchase at many stores, some of which offer this service for free. This practice also saves time by helping you avoid a separate ATM trip.

2. When you’re sticking to a budget or paying off debt

Since debit cards draw money directly from your checking account, they can be a great way to avoid overspending. That’s because using a debit card that’s tied to your checking account helps you avoid spending beyond your available funds. To ensure you don’t overdraw your account or drop below a balance at which you’re comfortable, you should monitor your spending and your checking account balance closely—it’s easy via online banking or your financial institution’s app.

To help you stay on top of your finances, many banks offer budgeting tools that work with your debit card and your checking account. Having a clear budget allows you to get real-time insights into your financial habits and lets you make spending adjustments as needed.

Also, by limiting most of your spending to your debit card, you can avoid adding to your outstanding debts on your lines of credit as you work on paying them down.

3. When you want to avoid credit card balances

Large balances on your credit cards accrue interest, making your purchases more expensive over time.

Using your debit card more often can get you in the mindset of spending only what’s in your account—thus helping you avoid those excessive credit card balances and costly interest charges.

Tip: Know when to use a debit card vs. credit card

It’s smart to strike a responsible balance between debit and credit cards in your financial life. Credit cards can help build your credit score and might offer valuable rewards, but relying too heavily on them can result in unwanted debt—particularly if you don’t have a realistic plan to pay them off. Consider saving credit cards for specific purposes—like emergencies or planned large expenses—to help you maintain a healthy approach to spending. Also be mindful that some businesses, such as retailers or restaurants, may have an added charge for paying with credit that you won’t have to pay for debit card transactions.

Articles may contain information from third parties. The inclusion of such information does not imply an affiliation with the bank or bank sponsorship, endorsement, or verification regarding the third party or information.

The information provided herein is for informational purposes only and is not intended to be construed as professional advice. Nothing contained in this article shall give rise to, or be construed to give rise to, any obligation or liability whatsoever on the part of Discover, a division of Capital One, N.A., or its affiliates.